ASX: PNX
November 2011
Disclaimer & Competent Person Statement
•
This presentation is an overview of the Company prepared with good intention. It is not a prospectus and offers no securities for
subscription or sale in any jurisdiction, nor a securities recommendation.
•
All information necessary for investment decisions is not contained herein and investors are encouraged to conduct their own research
of Phoenix Copper Limited in conjunction with legal, tax, business and financial consultation.
•
Phoenix Copper Limited, its directors, officers, employees and agents disclaim liability for any loss or damage suffered by reliance on
information contained in this report when making investment decisions. In addition, no express or implied representation or warranty
is given in relation to the completeness and sufficiency of the information, opinions or beliefs contained in this document or any other
written or oral information made or to be made available to any interested party or its advisors.
•
This presentation may refer to the intention of Phoenix Copper Limited but it does in no way intend to forecast forward looking
statements or future matters for the purposes of the Corporations Act or any other law. Future events are subject to risks and
uncertainties, and as such results, performance and achievements may in fact differ from those referred to in this presentation.
•
No liability is accepted for any loss, cost or damage suffered or incurred by the reliance on the sufficiency or completeness of the
information, opinions or beliefs contained forthwith.
•
Research, evaluation and analysis of the business, data and property are encouraged before making financial investments. Any
estimates, projections or opinions contained herein may involve subjective judgement, analysis and interpretation, and satisfaction of
ones owns decisions should be undertaken.
•
This report contains forward-looking statements. These forward-looking statements reflect management’s current beliefs based on
information currently available to management and are based on what management believes to be reasonable assumptions. A number
of factors could cause actual results, or expectations to differ materially from the results expressed or implied in the forward looking
statements.
•
Information of a scientific or technical nature in this presentation, including information that relates to Exploration Results, is based on
and accurately reflects information compiled by Mr Mark Manly and Mr Paul Dowd, who are both employees of Phoenix Copper
Limited. Mr Manly is a Member and Mr Dowd is a Fellow of the Australasian Institute of Mining and Metallurgy and both have
sufficient experience relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they
are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr Manly and Mr Dowd consent to the inclusion in this report of the matters based on
their information in the form and context in which it appears.
25 November 2011
Trends of Crude Steel Consumption relative to Gross National Income
Bubble represents population size of country 2007
Assets at Various Stages of Development
– Superior to Most Peers
PRODUCER
LCCM Assets
DEVELOPER
(Advanced Exploration)
Development of LCCM Assets
EXPLORER
(Brownfields & Greenfields)
Yorke Peninsula – Burra to Kapunda – LCCM Assets
25 November 2011
Yorke Peninsula – The Company Maker
PRODUCER
LCCM Assets
DEVELOPER
(Advanced Exploration)
Development of LCCM Assets
EXPLORER
(Brownfields & Greenfields)
Yorke Peninsula – Burra to Kapunda – LCCM Assets
25 November 2011
Olympic Domain “Elephant Country”
Olympic Domain from Prominent
Hill, Olympic Dam & Carapateena to
the Yorke Peninsula.
Exploration success in these types of
geological environments can
transform a junior company
•
•
•
•
•
Olympic Dam (BHPB)
Prominent Hill (Oz Minerals)
Carapateena (Oz Minerals)
Hillside (Rex Minerals)
Moonta-Wallaroo (historic)
25 November 2011
>78 Mt Cu
2.5 Mt Cu
2.6 Mt Cu
1.5 Mt Cu
>355 Kt Cu
&
&
&
&
&
90 Mozs Au
>3 Mozs Au (Cu Ore)
6.5 Mozs Au (Inf Res)
1.4 Mozs Au
64 Kozs Au
6
Highly Prospective Structural Setting
Rex Minerals - Inferred Resource of 170Mt @ 0.7% copper & 0.2g/t gold in sheared
rocks of the Hiltaba suite closely associated with the Pine Point Fault at Hillside.
Phoenix Copper has identified targets in the geophysical data:
• structures splaying off the Pine Point Fault.
• a south west extension of the Pine Point Fault .
• other significant structures disrupting the Hiltaba Suite in PNX’s ELs.
Drill Targets refined by Airborne EM to commence after crops removed
MAGNETICS
GRAVITY
DEPTH TO CAMBRIAN
Hillside
Hillside
25 November 2011
Hillside
13 Target Areas Identified
• Phoenix Copper 3D Modelling of Aeromagnetic Data to
identify significant bodies of rock adjacent deep seated
structures similar to those seen at Hillside or Moonta.
Targets for follow up exploration were derived
• Targets T1, 2, 4, 5, 7, 8, 12 and 13 - alkali feldspar and
magnetite metasomatic alteration Hillside-style Target
• Targets T3, 6, 9, 10 and 11 - moderate to weakly
magnetic bodies may be associated with metavolcanics
and metasediments intruded by Hiltaba Suite granitoids
Moonta-style Targets
Several areas of high magnetic
susceptibility associated with
significant structures were
identified.
25 November 2011
Yorke Peninsula Exploration Program
• Airborne survey 23rd Nov 2011
– more precise location of drill collars
– EL4031 Nth Block and EL4312 Nth section
of Southern Block
– cost ~ $250,000 – PACE funding
• Priority 1: coincident 3D magnetic
and VTEM
• Crops harvested Dec 2011 - drill locations
available Mar 2012
(subject to access agreements with landholders)
– initial program of 8 x ~ 200m deep holes
– if successful, a further program (2,000m) drilling
on best 4 targets
25 November 2011
Significant Value Potential at Burra
“The best place to search for an
orebody is within the shadow of
the headframe”
PRODUCER
LCCM Assets
DEVELOPER
(Advanced Exploration)
Development of LCCM Assets
EXPLORER
(Brownfields & Greenfields)
Yorke Peninsula – Burra to Kapunda – LCCM Assets
25 November 2011
Burra Project
• 6 Contiguous exploration licences that
surround the historic Monster Mine
• The Monster Mine produced 2.6Mt of
Cu ore in 2 major mining phases (1845
– 1877, 1970 – 1981)
• Monster Mine itself is within an area
reserved from the Mining Act and
excluded from EL4226, but is an
important indicator of the potential of
the Burra North Prospect
• Primary source of Monster Mine
secondary mineralisation yet to be
discovered
– little deep drilling undertaken to date
25 November 2011
Burra North Prospect
•
Significant potential for repetitions of the
Monster Mine
–
Northern area under-explored – no reported
drilling immediately north west of the Monster
Mine pit
–
same fault zone that hosts Monster Mine
–
several significant IP anomalies identified around
Burra
North
Prospect
Section to
be drilled
Monster
Mine Pit
the Monster Mine (refer green hatched areas on
adjacent map)
•
Planned drilling campaign early 2012
–
Phase 1 – 8 diamond holes to test heart of IP
anomaly
25 November 2011
Burra
“reserve”
Significant Value Remains in Leigh Creek Assets
PRODUCER
LCCM Assets
DEVELOPER
(Advanced Exploration)
Development of LCCM Assets
EXPLORER
(Brownfields & Greenfields)
Yorke Peninsula – Burra to Kapunda – LCCM Assets
25 November 2011
Leigh Creek Assets – Development Plan
Lorna Doone
&
Lynda
ML5498
11,900 t Cu
(Indicated & Inferred
Mineral Resource)
in two proposed open
pits.
Mountain of Light ML5467
7,700 t Cu
(Indicated & Inferred
Mineral Resource)
in two planned open pits.
Operating Heap Leach and
Copper cementation plant.
Approx
65kms
Mt Coffin
ML 5741
Historic drilling has
many significant high
grade copper
intercepts including
8m @ 2.70% Cu
20m @ 2.00% Cu
11m @ 4.10% Cu
0
25 November 2011
5km
14
Mountain of Light Learnings
Significant assumptions in original feasibility study proved to be inaccurate:
• Effects of clays & water table on heap leach operation – extreme
• Lack of working capital
• No scale up from test-work to operation
• Significant Cu required for pond and pad inventory
• Less than ideal infrastructure design (ponds too small, no ILS pond)
• Lack of technical & costs “History”
• Initial mining contractor created backlog & discontinuity – contract
terminated
• Incorrect crusher for material type - utilised as the only available unit for
continuity
• Availability of skilled & non-skilled workforce; accommodation
25 November 2011
15
Feasibility Study
• Mining plan to start in Paltridge North starter pit
• Mining 7.4tpd of contained Copper required for production of 4.4tpd
contained Copper in cement
• 3 year mine life at the above rates
• High levels of beneficiation in the testwork ~100% of the oxide resource
may be mined, reducing the 0.4% cutoff grade and increasing the available
copper to leaching
• Crushing options include MMD mineral sizer
or tooth roll crusher
 less abrasive,
 high utilisation in clay bearing rock,
 lower operating and maintenance cost
than high impact crushers
25 November 2011
16
Testwork
33% Tonnes
Ore
79% Copper
Leach >2 x Y% Cu
Ore 100%
Screening
Waste
Y% Cu
•
•
•
67% Tonnes
Waste
PN starter pit Results: +250µm matl contains 78.1% of Cu for
 33.5% of the mass, and
 Grade from 0.55% Cu to 1.27% Cu, an
upgrade factor of 2.27
Up to a 15% Cu loss in the -38µm fraction
Tests to confirm losses generated through
abrasion in crushing process
25 November 2011
•
•
•
•
21% Copper
Optimum split
 Historical tests 75µm,
 Current tests
250µm
Coarse Copper split – Hydrosizing N/R?
Tests to confirm equipment selection Scrubbing Drum or Screen Washing
78-90% Acid soluble Cu - size dependent
17
Schedule
• End Nov 2011, scrubbing testwork complete
• Limited Hydrosizing work required, complete by mid Dec 2011
• Next phase of testwork to begin in Dec (brought forward from Jan), this
will take a minimum of 60 days
 Bottle roll for initial acid consumption on coarse size fractions
 Load percolation for irrigation rates and slump factor
 Initial agglomeration
 Columns to determine leach curves
25 November 2011
18
Estimated Capital requirements
Sourcing actual capital costs now test work data has been received and
equipment selection is more focussed.
Indicative Pricing (± 35%):• Crusher, feeder, screens
$650K
• Scrubbing drum
$100K
• EPCM, Plant Constn, incl civils, piping, etc
$1270K
• Current operation upgrades & expansion
$650K
SUBTOTAL
$2670K
• Pre-strip (Working Capital)
$600-700K
TOTAL
$3370K
25 November 2011
19
Process Flow
SCRUBBED COARSE
ORE +12.5mm
ROM Ore
Crushed Ore
-25mm
COARSE
ORE
BLENDING
SCRUBBED
ORE -12.5mm
SLIMES/FINES
-250µm
THICKENER
2 DECK
SCREEN
DESLIMED
COARSE ORE
+250µm
DESLIMED
COARSE ORE +1.0mm
TAILINGS
25 November 2011
HEAP LEACH
COPPER
CEMENT
20
Conclusion
Not Just Another Junior Explorer
Distinguished from Peers
Producer-Developer-Explorer
High Quality Assets
Exploration at Yorke Peninsula – “Elephant Country”
25 November 2011
21
Forecast Expenditure
Exploration
$’000
Yorke
Peninsula
Burra
North
Total
Exploration
2011 - 2012
$1,623
$940
$2,563
LCCM
Studies
Total
$250
$2,813
Total expenditures are based upon successful results, resulting in follow up drilling costs
Yorke Peninsula 2011:
Notifications for VTEM
Fly VTEM survey. Obtain waivers for gravity/geochem
Process the VTEM data. Obtain waivers for gravity/geochem
Economic Geological Tour Yorke Peninsula.
2012 January - June:
Prepare for Diamond drilling program.
Undertake Ground Gravity over select Target clusters
Undertake calcrete sampling over select target Clusters
Project Supervision Contract Geologist
Eight, ~200m deep holes to test VTEM/3D Mag targets.
Project Supervision Contract Geologist
Process data from Yorke Peninsula Drilling.
Project Supervision Contract Geologist
July- December:
~ Twenty -60 degree angled holes 150m deep
Project Supervision Contract Geologist
Ground Gravity on select targets 50m line spacing 20m dipoles (1km target)
Project Supervision Contract Geologist
25 November 2011
$15,000
$240,000
$25,000
$8,000
$60,000
$80,000
$45,000
$40,000
$400,000
$40,000
$30,000
$40,000
$270,000
$40,000
$250,000
$40,000
$1,623,000
Forecast Expenditure
Exploration
$’000
Yorke
Peninsula
Burra
North
Total
Exploration
2011 - 2012
$1,623
$940
$2,563
LCCM
Studies
Total
$250
$2,813
Total expenditures are based upon successful results, resulting in follow up drilling costs
Burra 2011:
FPXRF, surveying, geological mapping, planning & obtaining waivers to drill.
FPXRF, surveying, geological mapping, planning & obtaining waivers to drill.
FPXRF, prepare for Diamond drilling program.
2012 January - June:
Four, ~200m deep, holes ~800m N of Nthn edge Monster Mine O/Pit.
Process data from Burra North Drilling.
July-November:
If successful 2000m of RC drilling on best targets
Project Supervision Contract Geologist
If successful 2000m of RC drilling on best targets
Project Supervision Contract Geologist
25 November 2011
$45,000
$45,000
$60,000
$220,000
$30,000
$230,000
$40,000
$230,000
$40,000
$940,000
23
Annual Admin & O/Heads for PNX as
a Producing Company
47.3%
$800,000
$600,000
50%
PNX Cost Advantages include, FP XRF and Dry Sample
Prep and Laboratory at MoL
40%
30%
$400,000
21.0%
12.8%
$200,000
$0
20%
11.8%
7.2%
$320,042
$109,430
Statutory &
Registration
Costs
Investor
Relations,
Promotions &
Membership
10%
$194,905
$179,176
$720,000
0%
Office & Admin Insurance, Bank Remuneration,
Servs, Taxes, etc
& Legal
On-Costs,
Workers Comp &
Tax
Admin & Overhead for Producer ~$1.5M; for Explorer ~$1.3M
25 November 2011
24
Board Equity
No. Shares % of Total
MR PETER JAMES WATSON & ASSOCS
8,228,000
5.06%
PAUL J DOWD & ASSOCS
1,530,000
0.94%
MR GRAHAM SPURLING & ASSOCS
935,084
0.58%
MR DAVID HILLIER & ASSOCS
240,000
0.15%
10,933,084
6.73%
TOTAL
25 November 2011
25